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2014 FERTECON Limited Page 1 of 8 www.fertecon.com

21 February 2014

Several shipments expected to arrive in India at around $27-29 cfr in coming weeks

Construction to begin on Sherritts 2,000 t/d sulphuric acid plant in Cuba in Q2

Mineral Metalurgica Boleo to start up production at Mexican copper mine in Q1

Several miners receive ore export permits from Indonesian government

Bulgarian January-November 2013 acid exports up 36% on same period of 2012

FERTECON PRICE SERVICE PRICE INDICATIONS

21 February 14 February Notes

NW Europe /cfr 45-75 45-75 Q1 contracts

Brazil $/cfr 39-45 39-45 Recent business

Chile $/cfr Mejillones (spot) 59-69 59-69 Peruvian contracts

US Gulf $/cfr (spot) 35-41 35-41

Tunisia $/cfr nm nm

Med $/cfr 21-25 21-25 Low end Morocco

Turkey $/cfr 20-26 20-26 Smelter acid

LIQUID SULPHUR

NW Europe cpt 170-192 170-192 Q1 2014 contracts

Delivered Benelux (refinery) 131-149 131-149 Q1 2014 contracts

Tampa/Deliv.Cent.Fla (LT) 110 110 Q12014 contracts

SULPHUR /SULPHURIC ACID PRICES

NEW FERTECON PHONE NUMBER: +44 20 755 19790

0

50

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11J F M A M J J A S O M D 12J F M A M J J A S O N D 13J F M A M J J A S O N D J F

Acid NW Europe/cfr

Acid Brazil $/t cfr

Sulphur NW Europe cpt

FERTECON 21 February 2014


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21 February 2014New phone number +44 20 755 19790

ANALYSIS

This week has brought no relief to suppliers trying to place sulphuric acid in the Chinese market, as solid and liquid

sulphur prices continued to increase. As a result, it has been reported that most sulphur burners in Shandong province

have either shut down or cut back output. In turn, this is expected to result in liquid sulphur storage tanks filling up sooner

than expected. Due to higher sulphur prices, sulphur burners have increased the price of sulphuric acid and smeltershave also raised their prices, yet demand from the downstream industries is reportedly subdued.

Contract negotiations between Japanese and South Korean suppliers and Chilean buyers have yet to reach a settlement

and it is understood that neither side are in a hurry to agree. Suppliers are baulking at tabled prices that indicate negative

netbacks, and buyers are supported by reportedly high levels of inventory in the tanks.

In Latin America, it seems that there is no urgency to cover Brazilian requirements, as no fresh deals have been reported

between European sellers and Brazilian buyers this week. In Morocco, the disruption to port activity at Jorf Lasfar has

eased this week and several vessels are reported to be discharging.

The Indonesian governments decision to ban ore exports from 12 January continues to cause confusion. It has emerged

that a number of miners have been granted export permits allowing the sale of unprocessed minerals, but even in light of

this the ban is reported to be proving costly to Indonesia s economy in lost revenue.

MARKETS

BELGIUM: November imports were 13,578 t, almost all from Germany, a drop of 41% on November 2012. This

brought January-November imports to 224,842 t, an increase of 14% on the same period of 2012. The main sources of

supply were (000 t) Germany 117 (up5% on 2012), the Netherlands 50 (up 93%), France 39 (down 8%) and Norway

19%) up 7%. Source: Eurostat / GTIS

FRANCE: December imports were 27,827 t, a drop of 9% on December 2012. The main sources of supply were

Belgium 8,824 t (down 8%), Germany 6,835 t (down 23%) and Spain 5,670 t (up 47%). This brought 2013 imports to

353,315 t, a drop of 2% on 2012. The main sources of supply were (000 t) Germany 115 (up 8%), Belgium 102 (down

16%), Spain 55 (up 10%), Italy 32 (up 16%) and Bulgaria 21(down 12%). Source: Eurostat / GTIS

GERMANY: November imports were 20,106 t, an increase of 66% on November 2012. The main sources of supply

were Belgium 9,786 t (up 168%) and Poland 5,845 t (up 42%). This brought January-November imports to 184,727 t, a

drop of 12% on the same period of 2012. The main sources of supply were (000 t) Belgium 66 (down 5% on 2012),

Poland 56 (down 19%), the Netherlands 23 (down 20%) and Austria 14 (up 6%). Source: Eurostat / GTIS

NETHERLANDS: November imports were 14,309 t, a drop of 53% on November 2012. The main sources of supply

were Germany 8,516 t (down 40%) and Belgium 5,660 (down 57%). This brought January-November imports to 325,995

t, a drop of 11% on the same period of 2012. The main sources of supply were (000 t) Belg ium 167 (down 5%),

Germany 134 (down 14%) and France 25 (down 30%). Source: Eurostat / GTIS

PORTUGAL: December imports were 10,531 t, almost all from Spain, a drop of 21% on December 2012. This brought

January-November imports to 159,468 t, an increase of 27% on the same period of 2012. The main sources of supply

were (000 t) Spain 112 (up 8%), Germany 22 (up 112%) and Italy 20 (up 94%). Source: Eurostat / GTIS

UK: December imports were 941 t, a drop of 94% on December 2012. This brought 2013 imports to189,542 t, a drop

of 9% on 2012. The main sources of supply were (000 t) Germany 98 (down 21%), Finland 47 (up 171%), Norway 17

(down 45%) and Belgium 14 (up 0.03%). Source: Eurostat / GTIS

MOROCCO: Disruption to port activity at Jorf Lasfar is reported to have continued through 18 February although

operations have been close to normal over the past three days. However, it is still understood that DAP/MAP granulation

at Jorf Lasfar remains at a standstill.

DEMOCRATIC REPUBLIC OF CONGO: Imports from South Africa, the DRCs main source of sulphur, amounted to

45,866 t in 2013, up from 26,650 t in 2012. The rise in imports is due to increased mining activity which requires sulphur

to produce sulphuric acid. Source: South African Revenue Service / GTIS


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MADAGASCAR: Trammo is planning to load 30,000 t of sulphur in Qatar for Madagascar next week. Trammo has the

contract to supply sulphur and ammonia to Ambatovy. It is estimated that the total sulphur volume will be about 400,000 t

for 2014 divided into monthly lots.

SOUTH AFRICA: Sulphuric acid supply is reportedly long as consumption from Meridians Phalaborwa P205 plant has

reduced. Meridians 220,000 t/y P2O5 Phalaborwa plant is rumoured to have shut down in December due to high

production costs vs low phosphate prices. The plant continues to produce SSP using sulphuric acid from thePhalaborwa Mining Co.

Strikes in the country's platinum sector have continued this week, now in their fifth week, as union workers continue to

reject wage offers by platinum miners. The Association of Mineworkers and Construction Union's (Amcu), representing

workers on strike demand a minimum wage of $1,125/month.

Around 80,000 miners downed tools on 23 January at Lonmin, Anglo American Platinum and Impala Platinum due to

disagreements over pay increases. The miners claim they have lost a collective $400 million since the strikes began.

South Africa holds around 80% of the world's known platinum reserves.

ZAMBIA: Sulphur imports from South Africa amounted to 285,029 t in 2013, an increase of 78% on 2012. Most of the

sulphur imported to the country is burnt to produce sulphuric acid. Source: South African Revenue Service / GTIS

CHINA: As a result of high sulphur prices, most sulphur burners in Shandong province are rumoured to have shut

down or cut back production as burners cannot compete against low priced smelter acid. This has reportedly resulted in

a reduction in demand for Japanese molten sulphur as molten sulphur tanks are filling up.

Due to higher sulphur prices, sulphur burners have increased the price of sulphuric acid by Rmb 30 to Rmb 270 (mid

$40s), equivalent to about $135 cfr for sulphur. Similarly, smelters have raised prices by Rmb 30 to Rmb 240 (low $40s),

equivalent to about $120 cfr for sulphur, which is still at a discount to burner acid. Demand from the downstream

industries is reportedly subdued. In comparison, contract imports from South Korea are in the low $20s cfr.

It is reported that port warehouse and refinery sulphur prices have increased by about Rmb 30-50 ($5-8). Apart from the

odd deal by speculators in the $200s cfr, little fresh business has been concluded as major end-users in both chemical

and phosphates industries have so far refrained from buying sulphur at these prices. It is reported that bids by end-users

are around $190-200 cfr. Some end-users are reportedly holding off from purchasing until after the 9th China

International Sulphur and Derivatives Summit next week where they are hoping to glean what to expect in the near term.

INDIA: Hindalco is expected to deliver 16,000 t to Paradeep on the Zhumin Victoriaaround the 2 March. 10,000 t of the

shipment is rumoured to be for IFFCO and 6,000 t is for PPL.

Korea Zinc is expected to deliver around 19,000 t on the Fairchem Mustangto IFFCO at Paradeep during H2 March,

under long-term contract.

Interacid is expected to deliver 19,000 t to IFFCO at Paradeep during H2 March, under long-term contract.

It is understood that all contracts for Q1 have now settled in the range $28-29 cfr. Supply from South Korea would result

in negative netbacks as freight is estimated at $35-37.

Korea Zinc IFFCO Paradeep MTM Shanghai 20 $57-58

Sterlite IFFCO Paradeep Clipper Daisy 12 03-Dec $30

Hindalco IFFCO Paradeep Global Peace 14.3 06-Dec $51

Sterlite CIL Kakinada Valor 7.5 06-Dec

Interacid PPL Paradeep Chemstar Stellar 9.9 03-Dec

Interacid CIL Vizag Chemstar Stellar 9.4 06-Dec

Sterlite PPL Tuticorin SC Hong Kong 19 13 Dec

Sterlite PPL Tuticorin MT Valor 19 13 Dec

Korean Zinc PPL Paradeep MTM Princess 19.9 14 Dec

Hindalco IFFCO Paradeep MT Mid Fighter 16.5 18-19 DecSterlite PPL Paradeep SC Hong Kong 19 29 Dec

? ? Tuticorin MT SC Shantou 19 29 Dec


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Total December to date 185.5

Interacid IFFCO Paradeep Bochem Ghent 21 02 Jan $65

Sterlite PPL Paradeep Valore 16 04 Jan

Sterlite IFFCO Paradeep SC Shantou 18 06 Jan Ard $28

Korean Zinc PPL Paradeep Fairchem Colt 19 25 JanHindalco IFFCO Paradeep MTM Rotterdam 19 26 Jan

Total January to date 93

Hindalco/India IFFCO Paradeep Stanley Park 15 01 Feb Ard $28

Hindalco/India IFFCO Paradeep Success Marlina 15 06 Feb

Korean Zinc PPL Paradeep Gibraltar 19.5 5 Feb Ard $29

IFFCO Paradeep Stanley Park 19 8 Feb

Mitsubishi/Japan IFFCO Paradeep Mid Nature 19 20 Feb

Sterlite/India PPL Paradeep Union Fortune 15 14 Feb

Total February to date 102.5

Hindalco/India IFFCO/PPL Paradeep Zhumin Victoria 16 02 Mar $27-29

Korea Zinc IFFCO Paradeep Fairchem Mustang 19 H2 March $28-29

Interacid IFFCO Paradeep - 19 H2 March $28-29

Total March to date 54

INDONESIA: Several companies have received permits to export mineral ore this week, following drastic changes in

the countrys export rules on 12 January. It is reported that since the implementation of the export ban, around $500

million worth of monthly metal ore and concentrate exports stopped due to confusion surrounding the new legislation.

The new mining law includes a mineral ore export ban and a progressive tax on concentrate shipments. Companies that

apply for a special permit are allowed to export up to 2017. Before the ban, Indonesia was the world's top exporter of

nickel ore. It is also a major producer of refined tin, thermal coal, iron ore and bauxite.

Companies that received permits this week are as follows:

Vale Indonesia

PT Aneka Tambang (Antam) Indonesia's second biggest nickel producer

PT Smelting, Indonesia's only copper smelter

PT Indoferro, the country's first nickel pig iron smelter

PT Anugerah Nusantara Sejahtera

PT Global Multi Tambang

PT J. Resources Bolaang Mongondow

PT Long Xin Group Resources

PT Nusa Halmahera Mineral.

U.S. mining giants Freeport-McMoRan Copper & Gold Inc and Newmont Mining Corp were not on the list.

It is reported that Gresik has awarded Swiss Singapore in the low $210s cfr, covering its late-January tender for 30,000 t

of sulphur for March delivery. Gresik continues to be in the market for another 30,000 t shipment for April delivery.

UNITED STATES: TFI figures show phosphoric acid production at 724,000 ston P2O5 in January was 5% higher than

December 2013 and down 8% on January 2012. This brought July 2013-January 2014 output to 5.319 million ston P2O5

phosphoric acid, 1% higher than the prior year period.

BRAZIL: Although there have been several inquiries in the past couple of weeks, no deals were heard concluded.

Brazils annual acid imports from Europe are estimated at around 350,000 t/y, divided into about 3-4 shipments each

month.

CHILE: Last week there were reports of a 20,000 t inquiry for end-May delivery.


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CUBA: Construction is expected to begin on Sherritts2,000 t/d sulphuric acid plant in Moa in Q2 2014. The plant will

cost an estimated $65 million, financed by a Cuban financial institution and is expected to reduce nickel production cost

by 20%. Operations are expected to start in Q3 2015. The plant is expected to consume about 650-700 t/d of sulphur.

MEXICO: Mineral Metalurgica Boleo (MMB) is expected to start up production at its Boleo site in Q1 2014. Construction

began in November 2010. According to the companys website, about 91% of construction works have been carried out

and it expects to be producing and shipping its first cathodes in Q1 2014. The plant will use about 250-300,000 t/y ofsulphur to produce about 2,400 t/d of sulphuric acid.

SUPPLIERS

BELGIUM: November exports were 35,208 t, a drop of 23% on November 2012. The main destinations were the

Netherlands 18,612 t (up 25%) and France 9,299 t (down 40%). This brought January-November exports to 483,970 t, a

drop of 13% on the same period of 2012. The main destinations were (000 t) the Netherlands 166 (down 26%), France

108 (down 15%), Germany 66 (down 17%) and the US 54 (up from 2 t in 2012). Source: Eurostat / GTIS

BULGARIA: November exports were 94,942 t, an increase of 30% on November 2012. The main destinations were

Turkey 50,316 t (up 16%), Brazil 19,501 t (nil in 2012) and Morocco 19,211 t (up 68%). This brought January-November

exports to 890,707 t, an increase of 36% on the same period of 2012. The main destinations were as follows:

January-November

2011 2012 2013

Turkey 414,713 364,641 480,905

Morocco 19,124 50,961 169,906

Brazil 39,007 0 60,105

Namibia 59,117 40,527 59,525

Romania 51,160 39,511 33,623

Cuba 58,470 41,506 33,499

France 56,122 20,581 21,022

Greece 14,896 15,160 14,265

Macedonia 1,460 7,501 12,988

Bosnia & Herzegovina 3,610 3,197 4,016

Others 37,895 69,468 853

World 755,575 653,051 890,707

Source: Eurostat / GTIS

GERMANY: November exports were 98,313 t, an increase of 8% on November 2012. The main destinations were

Namibia 26,004 t (up 4%), the Netherlands 17,719 t (up 84%), Belgium 16,421 t (up 76%) and France 14,017 t (up

129%). This brought January-November exports to 1.001 million t, a drop of 18% on the same period of 2012. The maindestinations were as follows:

January-November

2011 2012 2013

Netherlands 104,272 124,015 127,916

France 107,844 97,443 113,323

Belgium 84,849 85,317 93,772

United States 107,402 95,628 79,710

Spain 556 59,256 73,596

Norway 19,637 17,889 71,222Cuba 79,158 57,038 69,571

United Kingdom 91,276 58,812 66,721


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Finland 376 19,835 56,845

Namibia 104,817 111,615 48,010

Brazil 97,761 203,808 46,431

Austria 28,671 36,605 39,736

Chile 44,278 65,685 22,280Uruguay 1 4,504 21,002

Denmark 26,969 16,315 14,367

Ireland 40,794 85,296 12,552

Portugal 30,187 13,063 9,360

Morocco 115 32,533 8,024

Switzerland 7,043 8,825 7,330

Czech Republic 2,072 554 4,301

Italy 1,359 1,293 2,072

Russia 265 183 1,246

Korea South 732 788 1,154

Others 52,145 19,528 10,707

World 1,032,576 1,215,825 1,001,241


ITALY: November exports were 21,554 t, a drop of 54% on November 2012. The main destinations were Spain 8,956 t

(up 83%) and Turkey 8,873 t (nil in 2012). This brought January-November exports to 287,865 t, a drop of 25% on the

same period of 2012. The main destinations were (000 t)Turkey 58 (up 55%), Spain 52 (up 35%), Cuba 49 (down 20%)

France 31 (up 26%) and Morocco 21 (down 61%). Source: Eurostat / GTIS

NETHERLANDS: November exports were 15,671 t, almost all to Cuba, down 38% on November 2012. This brought

January-November exports to 268,072 t, a drop of 13% on the same period of 2012. The main destinations were (000 t)Cuba 104 (nil in 2012), Belgium 73 (up 14%), Germany 44 (down 24%) and Non-EU Suppression 22 (down 82%).


POLAND: November exports were 15,963 t, a drop of 64% on November 2012. The main destinations were the Czech

Republic 6,645 t (up 163%) and Germany 6,214 t (up 1%). This brought January-November exports to 217,729 t, a drop

of 39% on the same period of 2012. The main destinations were (000 t) Germany 69 (down 4%), Czech Republic 58 (up

90%), US 27 (down 72%) and Slovakia 17 (down 25%). Source: Eurostat / GTIS

SPAIN: November exports were 46,634 t, a drop of 37% on November 2012. The main destinations were Morocco

23,700 t (down 19%), Cuba 10,500 t (up 0.01%), France 6,305 t (down 15%) and Portugal 6,063 t (down 11%). This

brought January-November exports to 774,511 t, a drop of 13% on the same period of 2012. The main destinations were

as follows:

January-November

2011 2012 2013

Morocco 162,366 274,574 198,226

Chile 124,972 175,342 147,854

Brazil 39,512 161,178 121,095

Portugal 105,474 81,656 80,006

Cuba 30,027 10,527 79,162

France 67,073 62,966 64,063

United States 72,101 59,157 41,578Namibia 0 0 38,557

Dominican Republic 1,680 0 3,626


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Others 65,690 67,422 348

World 668,895 892,818 774,511


SWEDEN: November exports were 49,770 t, up 1% on November 2012. The main destinations were Finland 16,160 t(up 33%), Norway 14,484 t (up 3%) and Cuba 10,500 (nil in 2012). This brought January-November exports to 457,112 t,

a drop of 5% on the same period of 2012. The main destinations were as follows:

January-November

2011 2012 2013

World 571,932 483,031 457,112

Finland 151,036 116,229 154,331UnitedStates 18,000 79,880 72,110

Norway 97,736 92,451 49,700

Brazil 35,000 72,083 48,626

Mexico 0 0 31,500

Cuba 19,200 28,650 20,300

Germany 220 150 20,226

Morocco 0 15,426 18,000

Denmark 2,824 10,239 14,942

Argentina 0 17,280 13,622

Uruguay 0 15,300 5,200UnitedKingdom 72,565 31,133 4,506

Belgium 104,392 0 4,024Others 70,961 4,211 25


JAPAN: According to media reportsJapan plans to bring a settlement with Indonesia to the World Trade Organization

on the matter of mineral ore export restrictions as it believes that Indonesias new ban is in violation of agreements made

by the WTO.

Indonesias export ban has disrupted the supply of minerals to Japan, such as nickel ore. It is estimated that about 40%

of nickel processed in Japan is imported from Indonesia.

PERU: December exports were 112,460 t, almost all to Chile, an increase of 20% on December 2012. This brought

2013 exports to 1.253 million t, almost all to Chile, an increase of 23% on 2012. Source: Peru Customs - SuperIntedencia Nacional de Aduanas / GTIS

TURNAROUNDS

Smelter Turnarounds

Company Month Location Duration (days)

IPL May/June Phosphate Hill 35 Planned

Cubaniquel H2 2014 Holguin Unknown Planned

PT Smelting January/February Surubaya, East Java 30 Planned

Pasar Smelter Since Nov. 2013 Leyte, Philippines Unknown Unplanned


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METALS PRICING

COPPER: The price of copper traded in the London Metal Exchange (LME) this week increased to $7,184.50/t from

$7,155/t last week. However, it is sti ll below the $7,335/t recorded a month ago.

NICKEL: Nickel this week traded on the LME at $14,260/t, up from $14,230/t a last week, but still below $14,430 amonth ago. Stocks of the alloying metal in LME-approved warehouses fell 132 tonnes to 269,256 tonnes.

COMPANY NEWS

INDIA: In the 17 February interim budget, the total amount allocated to the fertilizer subsidy is Rs 679.7 billion

(US$11.01 billion). This is Rs 20 billion or 3% higher than the Rs 659.7 billion initially allocated in last years budget bu t

roughly level with the Rs 679.71 billion expected for the 2013/14 year. However, in the 2014-15 budget, the allocations

for urea are higher, to the detriment again of decontrolled fertilizers (DAP, MOP and complexes). In the coming year, Rs

310 billion is to be supplied for indigenous urea, Rs 123 billion for imported urea, and Rs 246.7 billion for decontrolled

fertilizers.

AUSTRALIA: Global mining giant BHP Billiton Tuesday posted an 83% increase net profits to $8.1 billion in the six

months to 31 December 2013 on the back of spending cuts and strong production at its iron ore business. The result

compared to $4.2 billion in the same period in 2012, with revenues climbing 5.9% to $33.95 billion. Underlying earnings

which exclude one-off writedowns rose 31% to a higher than forecast $7.8 billion, with BHP Billiton declaring an

interim dividend of 59 cents a share, up 3.5% from a year ago.

AGRICULTURE

CROP FUTURES: Futures prices for March contracts for all the major crops are markedly stronger on a week ago,

particularly wheat and soybeans. Much of the focus is on Brazil where concern over the severe dryness is boosting not

just prices for the major export crop soybeanbut also coffee, with prices for the latter seeing a dramatic surge, and

corn. With anxiety over Brazilian crops there may be some pull on US supplies, which is driving up near-term prices for

corn, wheat, and soybeans. Palm oil futures prices continue to gain this week, also on the back of dry weather in both

Malaysia and Indonesia causing production concerns, and strong export demand. (source: www.agra-net.com).

CME CROP PRICES

cents/bushel

ProductPrice

March 14

Weekly

Change

Price

July 2014

Price

Sept 2014

Price

Feb 2013

Corn 453.6 +13.6 464.6 465.2 700.4

Wheat 620.2 +33.2 617.0 625.4 738.4

Soybean 1,354.2 +31.2 1,324.6 1,192.0 1,482.6

Rough Rice 1,579.5 +17 1,538.5 1,409.0 1,602.5

Prices are Wednesdays closing rates for the forward months indicated. The 2013 price in the final column is the

forward price reported one year ago

ANALYST: JANOS GAL TEL: +44 207 551 9790 EMAIL:[email protected]

FERTECON SULPHURIC ACID REPORT is published weekly by:

FERTECON Limited, Royal Victoria House, The Pantiles, Tunbridge Wells, Kent TN2 5TE, UK.

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